While business has remained strong over the past year at Zingerman’s Bakehouse, Ann Arbor, Mich., numerous obstacles are holding the business back from pursuing growth opportunities, says Amy Emberling, managing partner. Offering an update from comments a year ago (six months into the COVID-19 pandemic), Emberling says staffing today is a principal challenge at the baking business she runs as well as across all 10 of Zingerman’s different businesses (ranging from a delicatessen and mail-order gift business to a creamery).
“What we’re faced with now is not being able to hire enough people,” she says, estimating the full company’s workforce size at 600. “At the moment, we would prefer to have 100 more people than we have. The bakery by mid-October needs another 35 or 40 on top of that. Plus, seasonal people for the mail-order business — we will want to hire 300 or 400 people. The demand will be there. We will see whether we can meet it.”
Finding production workers is the greatest need for the baking business, she says.
Zingerman’s bakes a wide variety of bread types, including sourdough, baguettes, Jewish rye, Paesano bread, farm bread and challah, as well as bagels and a range of pastries, cakes and cookies.
Established in 1992 as an adjunct to the Zingerman’s deli, the baking business has grown over the years thanks to an expansion of a mail-order operation together with a growing base of wholesale and foodservice customers in and around Ann Arbor.
In addition to staffing problems, Emberling expresses concerns with supply chain issues, including long lead times for packaging.
“During the spring our staff ordered packaging early for the holiday season,” she says. “At the time I thought it was premature. Now I’m grateful they did it. If they had waited, we probably wouldn’t have what we need.”
Emberling says flour, sugar and butter have not been a challenge to buy, but other products “here and there,” including chocolate have been.
Over the past year, the wholesale business has remained extremely strong, and the company has added new supermarket accounts.
“At the moment, we can’t take any more new customers because we don’t know if we can meet demand of current customers,” she says. “So we’re delaying anyone who expresses interest until January or later.”
Because the Ann Arbor economy relies heavily on the University of Michigan and its 45,000 students, the community’s businesses were very nervous a year ago as the 2020-21 school year started and students returned to the campus. While the school year was not a normal one, worst-case fears about potential disruptions to the baking business from the pandemic were not realized.
In-person classes ended quickly, but many of the university’s students remained in town while taking classes virtually. Massive surges in infection rates did not materialize. Restaurant business was highly restricted through the fall and the winter.
“They say ‘be diversified’ in many realms of our lives,” Emberling says. “Because we were quite diverse in our customer base, we were fine. Grocery stores continued at a good clip. Our Zingerman’s mail order, who we sell to, had a phenomenal fall and holiday season. We did not beat our (total) 2019 sales but stayed on par with previous years. We had made so many cuts in product line and allowed staff to leave and not replace them — we didn’t lay off many people. People left for a variety of reasons. We hadn’t replaced them in the spring, so we ran at a very lean and profitable level. It ended up being a good year after the holidays and through the winter.”
The company has been restoring stock-keeping units it had cut early in the pandemic and is again baking bagels daily again rather than three times a week.
For 2021-22, mail-order sales remain strong by historical measures but are down about 30% from last year’s pandemic-boosted levels (but still well above 2019 and earlier), Emberling says. Foodservice business has picked up significantly. With vaccines mandatory for students, in-person classes have resumed. Additionally, football is expected to be played this fall.
“So we could get very busy,” she says.
About 30% of Zingerman’s Bakehouse sales come from its retail shop, which has enjoyed dramatic growth this year, Emberling says.
“Our shop is running almost 25% over last year’s sales,” she says. “We don’t really know why. I’m talking about spring, between April and August. It has been building. I kept thinking it would stop. It hasn’t. It’s continued to grow.”
Reflecting on how the company has managed through the pandemic, Emberling says a major area of focus was on keeping Zingerman’s employees safe. Following guidance from the Washtenaw County health department has served the company well, she says.
“We’ve had 100 to 150 people working and only had four confirmed cases to date,” she says. “Of those, only one was initiated by contact in the bakery, we think.”
Vaccination has not been mandated at the company, and for a time wearing masks was optional for employees who showed proof of vaccination. With the surge in the Delta variant, that policy has changed.
“Now, we’re all wearing masks again.”
Another key to success has been showing flexibility with customers in a wide range of ways, including patience with accounts receivables.
“Or participating on promotions with them, even if they aren’t exactly what we need at the moment but if it helps their business,” Emberling says. “It’s just being good partners and understanding the different challenges they are having. It’s about being flexible with the rules about things. Maybe they had to close and didn’t remember to tell us not to deliver and not charging them for that. Just being good partners.”
A year ago Emberling says a remodeling plan for 2020 had been put on hold because of the pandemic.
“It’s still on hold,” she says. “Everything was so up in the air. We most likely would have gone last winter after the holiday season, but most of the country was still shut down. Now we are waiting until we see how this holiday goes before we do anything major. We are beginning to talk to equipment companies, starting to think about what we might want to do… if the world doesn’t shut down again.”